Analysis of Financial Performance Characteristics, Collateral Assessment and Business Type in the Decision to Provide Medium Credit Facilities at BRI Denpasar Using the Analytical Hierarchy Process Method

The Covid-19 pandemic caused an increase in commercial bank NPL from 2.6% (2019) to >3% (2020-2022), revealing the ineffectiveness of traditional credit assessment approaches that rely on collateral-heavy approach. This study analyzes the hierarchy of criteria priorities and specific characteristics in medium-sized credit facility decisions at BRI Denpasar using Analytical Hierarchy Process (AHP). Quantitative descriptive analytical method with 3-level hierarchical structure: objectives, three main criteria (financial performance, collateral assessment, business type), and seven sub-criteria. Primary data collected from 25 credit officers through pairwise comparison questionnaires, secondary data from 17 medium-sized credit customer companies for 2022-2024 period (ceiling ?Rp25 billion, operating ?3 years). Analysis used geometric mean and SpiceLogic software validation with CR ? 0.1. Results show financial performance dominance (54.8%), followed by business type (24.1%) and collateral assessment (21.1%). Highest sub-criteria: liquidity ratio (22.5%) with optimal Current Ratio 1.5-2.5, profitability ratio (18.0%) with sustainable ROA 8-15%, solvency ratio (14.3%) with DER 0.5-1.5. Business track record (12.0%) prioritized over business sector (10.0%), confirming shift towards character-centric evaluation. Research proves paradigm shift from collateral-heavy to integrated assessment prioritizing defensive financial capability and business integrity. AHP Score formula empirically validated with risk distribution 35.3% low, 29.4% medium, 23.5% high, 11.8% very high, providing objective framework for standardizing applicable medium-sized credit processes.

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Journal
American Journal of Economic and Management Business (AJEMB)
Published
2025-08-16
DOI
https://doi.org/10.58631/ajemb.v4i8.286
Primary Topic
Management and Optimization Techniques
Type
article
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article

Analysis of Financial Performance Characteristics, Collateral Assessment and Business Type in the Decision to Provide Medium Credit Facilities at BRI Denpasar Using the Analytical Hierarchy Process Method

Anisah Firli, Herry Primatama
American Journal of Economic and Management Business (AJEMB)
Management and Optimization Techniques
article

Analysis of Financial Performance Characteristics, Collateral Assessment and Business Type in the Decision to Provide Medium Credit Facilities at BRI Denpasar Using the Analytical Hierarchy Process Method

Anisah Firli, Herry Primatama
article en

Abstract

The Covid-19 pandemic caused an increase in commercial bank NPL from 2.6% (2019) to >3% (2020-2022), revealing the ineffectiveness of traditional credit assessment approaches that rely on collateral-heavy approach. This study analyzes the hierarchy of criteria priorities and specific characteristics in medium-sized credit facility decisions at BRI Denpasar using Analytical Hierarchy Process (AHP). Quantitative descriptive analytical method with 3-level hierarchical structure: objectives, three main criteria (financial performance, collateral assessment, business type), and seven sub-criteria. Primary data collected from 25 credit officers through pairwise comparison questionnaires, secondary data from 17 medium-sized credit customer companies for 2022-2024 period (ceiling ?Rp25 billion, operating ?3 years). Analysis used geometric mean and SpiceLogic software validation with CR ? 0.1. Results show financial performance dominance (54.8%), followed by business type (24.1%) and collateral assessment (21.1%). Highest sub-criteria: liquidity ratio (22.5%) with optimal Current Ratio 1.5-2.5, profitability ratio (18.0%) with sustainable ROA 8-15%, solvency ratio (14.3%) with DER 0.5-1.5. Business track record (12.0%) prioritized over business sector (10.0%), confirming shift towards character-centric evaluation. Research proves paradigm shift from collateral-heavy to integrated assessment prioritizing defensive financial capability and business integrity. AHP Score formula empirically validated with risk distribution 35.3% low, 29.4% medium, 23.5% high, 11.8% very high, providing objective framework for standardizing applicable medium-sized credit processes.

American Journal of Economic and Management Business (AJEMB)Vol. 4(8)
Telkom University (ID)
Openalex Percentile: Top 67%
Management and Optimization Techniques
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